3) TRAINING AS AN UTMOST PRIORITY

General training policy

The value of a consulting and IT services company lies in the quality of its intellectual capital. In a rapidly changing world, it is essential to update, adapt and develop the knowledge and expertise of employees to match cutting-edge technology and meet client requirements. New recruits join the Group keen to leverage and build on their knowledge and to gain rewarding professional experience. There is therefore a meeting of interests between the Group and its employees. This fundamental focus of competency development draws upon various approaches:

• standard training programs,

• mentoring systems,

• development of e-learning,

• training on projects,

• easily accessible databases for knowledge sharing,

• management of professional interest communities.

This approach is based on a culture of sharing and the use of networks to facilitate the sharing and use of knowledge, as well as innovation and collaboration.

Particular attention is paid to the training of executives, account managers and project leaders, as they play a key role in defining and implementing the Group’s strategy. New managerial training programs are regularly rolled out and will be revised in 2004 to include aspects related to the notion of corporate social responsibility and stewardship.

Considerable resources devoted to training

Resources are devoted to training both at Group level and locally. The Group’ s training policy uses a common global system called “Mylearning”, for which all Group employees worldwide can register. This includes a catalog of courses

available either in the form of e-learning or as classroom teaching. Classroom instruction is provided either at local training centers or within the new Group University which opened in early 2003. The €96 million investment made into this center reflects how important training is to the Group. This Group University is an ideal platform favoring employee integration and networking. In addition, training is provided locally (essentially for language reasons), based on the offerings described in training catalogues and servers.

An average of 12,700 persons followed at least one course in each quarter of 2003 (one person may follow several courses). This illustrates that the majority of employees benefited from training during the year. To this should be added training on projects as well as e-learning. These latter types of training are not measured in hours but in terms of the number of individuals who have completed a cycle. In 2003 over 20,000 courses were followed from an available catalog of

more than 2,000.

Anticipating needs, or “employability”

In an industry characterized by rapid technological change, we need to keep our employees' knowledge and skills up-todate and in line with market needs as a first priority in terms of both economics and employee development. This is why personalized development plans are designed at the time of the annual performance interview. Further, a systematic and iterative process is being deployed within operating units to review the portfolio of training offerings and plan for future needs with global and local programs geared to building up new competencies. Various partners and experts from Group businesses and from the Group's in-house certification network are taking part in this review.

The certification process

In this in-house peer review process, employees appraise the competencies of colleagues based on precise and clearly identified criteria – experience gained, knowledge sharing, use of in-house tools and methods, mentoring and leadership. The three-fold purpose of such certification is to:

• create a strong and recognized professional-interest community by sharing information, knowledge and skills in specific areas,

• ensure a blended distribution of competencies and a graduated progression therein, both for in-house needs and in relation to client service,

• thereby ensure a competitive edge for the company and increase the employee’s “employability”.

At the end of 2003, there were 2,285 persons certified at Group level, versus only 1,529 at the end of June 2003. The Group has an already long-standing external certification policy. Many sites or operating units have obtained ISO 9001 certification in France, the United Kingdom, Ireland, Belgium, Spain, Italy, Canada and India. More recently, sites have been working towards the CMM (Capability Maturity Model) certification that is specific to the applications development business. The Mumbai center in India obtained the highest CMM certification, while several applications development centers in the U.S. and France are either certified or about to be certified at Level 2 or Level 3.

4) A FIRM COMMITMENT TO INTERNAL COMMUNICATION

Because communications are an essential tool for rolling out knowledge, several initiatives have been put in place to promote it, particularly the following at Group level:

• the Group's intranet site, Talent, updated on a weekly basis, includes all information, processes and methods concerning the company and contains links to local sites, training sites and network communities,

• the Group University provides a platform for international exchange,

• cross-functional organizations have been set up by business or industry.

• Communication is also a daily task of management, drawing upon various local initiatives developed through newsletters, intranet sites, information meetings and person-to-person exchanges. There is also a Group procedure aimed at tracking employee satisfaction, which is managed locally. This tool is based on a set of questions that remain basically identical over time (albeit with some updating), to make it possible to monitor changes in satisfaction data and the impact of any corrective action taken. Employees are informed of the results of these satisfaction surveys. Internal communication also takes the form of a dialogue with employee representatives:

• within the International Works Council (IWC) set up in June 2001, where employee representatives from 15 European countries meet four times a year. Representatives from non-European countries will also be invited to attend as from 2004.

• at a local level through dialogue with unions or other employee representatives, within the labor bodies and through the processes provided for in relevant legislation, regulations and agreements. The Group has signed an agreement with the IWC to set up a dedicated website, to give all Group employees access to this information. Employee representatives were involved in the negotiations

• that followed the recent headcount reduction measures and redeployment plans. Such plans are always last resort solutions, as the Group always tries to limit or avoid, when possible, redundancy plans. When compatible with client service requirements, the Group offers measures such as:

• the possibility for employees who wish to do so to take a leave of absence. As of December 31, 2003, 1.2% of Group staff had taken up this option;

• the use of part-time work, which concerned 5.8% of the workforce at the end of 2003.

5) REMUNERATION POLICY

The Group's remuneration policy is based on common principles, applied in a decentralized way and tailored to local job market conditions and regulations. The aims of this policy are to:

• attract and retain top talent,

• reward performance with a remuneration model that is motivating yet flexible,

• be consistent with the Group's financial and operational targets.

When local rules allow this, employees can select from a predefined menu the components of their remuneration package. Profit-sharing is provided to employees where applicable under local regulations in the concerned country. Stock options are granted on a regular basis. These grants are made selectively, with the aim of retaining those employees who have made exceptional contributions to sales, production, innovation or management, or to reward specific initiatives. The total number of grantees under the fifth stock options plan is 4,765. The number of options granted to Directors represents a very small percentage of the total number of options granted.

6) DIVERSITY AND WORKING CONDITIONS

The Group complies with local labor legislation in all countries in which it operates and, by extension, with international labor regulations. In its relations with employees, the Group endeavors to guarantee equal opportunities to all and to apply its principles and values in such a way as to promote diversity, the physical integrity of its employees and a fair balance between work and private life.

The following are a few examples of Group initiatives in this area:

• in the Netherlands, a protocol in favor of minority rights was signed with the government, with the aim of ensuring that any complaint motivated by discrimination or harassment be reviewed and examined by an independent committee;

• in India, the recruitment policy in place is non-discriminatory with regard to religion, caste or geographical origin;

• in the United Kingdom, in 2003, the Cap Gemini subsidiary was named by the “Race for Opportunity” organization as one of the ten companies which made the most progress as regards respect for minorities;

• the Group is also part of outside think tanks and favors inhouse networks of people working to change the place of women in the corporate world and to lower barriers to women’ s professional enhancement. The Group has started to monitor the proportion of women at the highest levels of responsibility within its ranks. Work/Life balance is an issue about which employees have become much more aware over the past few years. Even though the services industry necessarily implies a fairly high level of adaptability and flexibility from employees, initiatives to promote this balance are being implemented locally:

• an annual quota of hours that employees can keep for their personal use over the course of the year;

• special leave or unpaid leave, above and beyond the legal allowance,

• sabbatical leave of up to one year, paid at 1/3 of an employee's salary (50 employees took advantage of this opportunity in 2003).

The Group has also developed a training module teaching managers that “effective work does not necessarily mean long hours at the office.” This policy based on respect for individuals is appreciated by employees of clients who join the Group under outsourcing contracts, thus giving the Group a further competitive edge.